1) The Wii can hold 512MB. No External Hard Drives are compatible with the Wii. Yet.
2) When you download a VC game, you can delete it and when you re-d/l it, you wont have to pay a thing.
3) I think it does... ask the other guys.
4) The Wii uses SD/miniSD/microSD or anything that works with a SD adapter.
I recomend 1GB because of all the channels/VC games/saves and stuff. They can be any brand.